Reliance Cellular, which provides cellular service in Jharkhand, Northeast, Bengal and Orissa, was not part of the deal. The two state-owned companies — MTNL and BSNL, which offer cellular service under the brandnames Dolphin and CellOne — were also left out of the arrangement.

The new tariff, which will benefit roughly one crore cellphone users, signifies the death of time and distance — the two factors that governed pricing till date. The Rs 2.99 per minute rate will be almost uniform and dumps the notion of peak and off-peak tariff.

Until now, operators charged Rs 2.40 per minute for STD calls over distances between 51 and 200 kms and Rs 4.80 per minute for those up to 500 kms.

This is the first instalment of rate cuts by cellular operators who plan to announce concessions every week till Reliance Infocomm launches its limited mobility service in March.

“Yeh bakra kishton me katega (the goat will be cut in instalments),” said Sunil Mittal, chief of the Bharti group which owns the country’s largest cellular operator, AirTel.

Communications minister Pramod Mahajan, who made a surprise appearance at the event, responded: “Sunil says the goat will be cut in instalments. I am not worried about who is going to be slaughtered. As long as non-vegetarian India keeps getting its mutton, we are not worried about whose goat is being carved up.”

The next cut could come by way of lower ISD and local call rates as early as Monday when cellular operators are meeting.

Bharti’s statement encapsulated the mood of cellular operators who fear they will bleed financially because of the onslaught from limited mobility players and yet must slash rates to stave off the challenge from Reliance and the Tatas, which are launching the service. Cellular operators claim their accumulated losses amount to Rs 8,000 crore.

Cellular customers will have to pay airtime charges in addition to the STD call rate. Airtime charges usually range from Re 1 to Rs 2.40 depending on the scheme the subscriber has chosen.

The mobile-to-mobile rate will, however, be more expensive than the STD rate announced by Reliance for its IndiaMobile limited mobility service. Reliance is offering 40 paise per minute for STD calls but that rate is restricted only within its own network. And there is a rider: the rate applies for talk time up to 400 minutes a month.

Reliance has not announced what the rate will be for calls from its limited mobility service to fixed phones. Until it does so, the rate can be taken to be the same as that from a fixed phone to another fixed phone.

“It reminds me of a Bata shoe price,” said Mahajan, taking a sideswipe at cellular operators. But he threw his hat into the ring by announcing that BSNL and MTNL would also cut rates.

Cellular operators were planning to give their customers a double bonanza but failed at the last minute to agree on an appropriate system that would have enabled them to offer free incoming calls.

Free incoming calls from fixed line telephone subscribers to cellphone users, which is one of the major initiatives being planned by mobile operators, is another issue currently pending before the telecom watchdog, Trai. Cellphone companies are mounting pressure for extension of the calling-party-pays concept to them. The facility is available to limited mobility service providers at the moment.